Paris: Air France-KLM is firming up a plan to raise funds by May of next year after agreeing a rescue package from the Dutch and French governments to help outlast the global aviation crisis.
The carrier "intends to implement measures to strengthen its equity and quasi-equity," Air France-KLM said in a statement reiterating a timeline given previously by CEO Ben Smith. To lower financing costs, it's redeeming 403.3 million euros ($483 million) in notes.
Air France-KLM, in which the two European states own a combined 28 per cent stake, posted a record quarterly loss in July and is predicting "significantly negative" earnings in the second-half. With passenger capacity not expected to recover until 2024, it is phasing out larger Airbus SE A380 and A340 jets.
Grabbing a lifeline
At the end of June, Air France-KLM had 14.2 billion euros of liquidity and credit lines at its disposal, including 10.4 billion euros in government loans and guarantees. The bailout offered a lifeline for the carrier, which ranks second in Europe after Deutsche Lufthansa AG in terms of passenger traffic.
European travel picked up over the past two months after governments relaxed lockdown measures to contain the COVID-19 pandemic, though the pace of recovery has been slowed by renewed outbreaks in several parts of the continent.
Air France-KLM lifted its outlook on third-quarter capacity to 45 per cent of available seat kilometers from a previous prediction of 20 per cent. It expects 65 per cent in the final three months of the year, though hasn't yet announced its winter flight schedule.